Which of the following is an advantage of using a functional structure when pursuing a cost

Chapter 11

Organizational Design: Structure, Culture, and Control

Multiple Choice Questions

1.Which of the following terms or phrases best characterizes Zappos' organizational

structure?

A. Centralize

d

B. Mechanist

ic

C. Extremely

tall

D. Extremely

flat

2.Organizational design is:

A. the process of creating, implementing, and modifying the structure of an

organization.

B. primarily focused on replacing a firm's competitive advantage with

competitive parity.

C. a process that always functions independently of strategy

formulation.

D. primarily focused on formulating effective strategies, not

implementing them.

3.What was one of the reasons for Jerry Yang's failure at Yahoo?

A. Jerry made many necessary changes to the company's organizational

structure.

B. Jerry established a successful organizational structure and culture, but could not

assert control.

C. Jerry's preference for obtaining consensus among his managers led to bickering

and infighting.

D. Jerry focused most strategic changes on improving user experience and increasing

advertising revenues.

11-1

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McGraw-Hill Education.

4700- Chapter 11

Which of the following terms or phrases best characterizes Zappos' organizational structure?
A.
centralized
B.
mechanistic
C.
extremely tall
D.
extremely flat

Organizational design is
A.
the process of creating, implementing, and modifying the structure of an organization.
B.
primarily focused on replacing a firm's competitive advantage with competitive parity.
C.
a process that always functions independently o

What was one of the reasons for Jerry Yang's failure at Yahoo?
A.
Jerry made many necessary changes to the company's organizational structure.
B.
Jerry established a successful organizational structure and culture, but could not assert control.
C.
Jerry's

Why does strategy implementation often require changes within an organization?
A.
Strategy implementation is less important than strategy formulation.
B.
Strategy implementation transforms strategy into actions and business models.
C.
Strategy always foll

Which of the following statements is true of strategy in an organization?
A.
Strategy implementation is considered unsuccessful if it requires changes within an organization.
B.
To implement a strategy successfully, an organization's structure must be rig

To maintain its core competency of providing a superior customer experience in the face of explosive growth, Zappos split the organization into 10 standalone units. Which of the following does this scenario best illustrate?
A.
how an organization accommod

What most likely happens when a firm optimizes its organizational structure to its current situation?
A.
It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.
B.
It achieves superio

A firm's _____ determines how the work efforts of individuals and teams are orchestrated and how resources are distributed.
A.
norm
B.
culture
C.
structure
D.
control

Which of the following real-world scenarios best exemplifies formalization?
A.
Zappos' focus on allowing its customer service employees to use their own approach rather than depend on scripts
B.
McDonald's use of standard operating procedures across the w

Which of the following is an unintended side effect of a high degree of specialization in an organization?
A.
decreased trade-off between breadth and depth of knowledge
B.
decreased opportunities for the division of labor
C.
reduced employee satisfaction

_____ describes the degree to which a task is divided into separate jobs.
A.
Hierarchy
B.
Formalization
C.
Centralization
D.
Specialization

McDonald's uses detailed standard operating procedures throughout the world to ensure product quality. This implies that McDonald's has a high degree of
A.
formalization.
B.
specialization.
C.
decentralization.
D.
hierarchy.

A high degree of formalization in an organization is most likely to
A.
improve customer service.
B.
slow down decision making.
C.
produce inconsistent results.
D.
increase creativity and innovation.

W. L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfactio

W. L. Gore & Associates is organized in such a way that it has no formal job titles, job descriptions, or chains of command. This implies that it has
A.
a formalized structure.
B.
a decentralized structure.
C.
organizational inertia.
D.
a top-down managem

Which of the following is true of W. L. Gore & Associates, which has a lattice organizational form?
A.
It has a high degree of centralization.
B.
All employees are empowered to speak to all other employees in the organization.
C.
Its culture has been link

Which of the following statements about W. L. Gore & Associates best supports the fact that it is organized in an informal and decentralized manner?
A.
W. L. Gore & Associates' employees are organized by their seniors into teams that are led by sponsors,

How does W. L. Gore exemplify founder imprinting?
A.
Gore consistently ranks among the top 25 of Fortune's "100 Best Companies to Work For" list.
B.
W. L. Gore & Associates is organized in a formal and centralized manner.
C.
The compensation of Gore assoc

_____ refers to the degree to which decision making is concentrated at the top of the organization.
A.
Specialization
B.
Formalization
C.
Naturalization
D.
Centralization

Which of the following did management at Zappos do to reduce the level of formalization in their organization?
A.
They avoided asking their customer service reps in call centers to follow a detailed script.
B.
They increased their reliance on drop-shipmen

Black Mouse Inc., a web development firm, is headed by Rob Dennis, the CEO. Each functional department of the company�marketing, finance, and HR�has a president who reports to the CEO directly. Each department has various managers who manage teams. The ma

Grey Designs Inc., a graphic design firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Charles Grey, the CEO. The heads of the centralized HR, Finance, and M

Flight Stream Inc., a toy manufacturing company, encourages its employees to enjoy their work by taking on additional responsibilities or switching jobs with each other. It allows its employees immense flexibility in charting their own career path within

_____ organizations have a low degree of specialization and formalization as well as a flat organizational structure.
A.
Mechanistic
B.
Centralized
C.
Organic
D.
Top-down

Fast Call Inc. is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, Fast Call has a relaxed work environment where employees are free to discuss projects with each other. Employees

Since an organic structure helps a firm build core competencies in areas such as R&D and marketing, this structure is employed by firms that
A.
have a tall hierarchical structure.
B.
pursue a differentiation strategy at the business level.
C.
have a high

If a firm pursues only a differentiation strategy, it is most likely a(n) _____ organization.
A.
organic
B.
mechanistic
C.
integrated
D.
centralized

Which of the following is a feature of an organic organization?
A.
high degree of specialization
B.
rigid division of labor
C.
clear lines of authority
D.
high span of control

An organization is characterized as having a flexible division of labor, distributed decision making, and generalized knowledge of how to accomplish strategic goals valued. This organization is most likely _____ in nature.
A.
specialized
B.
organic
C.
mec

Walmart is an example of a(n) _____ organization.
A.
organic
B.
mechanistic
C.
decentralized
D.
informal

_____ organizations are characterized by a high degree of specialization and formalization, and tall hierarchies that rely on centralized decision making.
A.
Organic
B.
Virtual
C.
Mechanistic
D.
Flat

Which of the following characteristics of McDonald's best supports the fact that it is a mechanistic organization?
A.
It frequently ranks among the top 500 companies to work for.
B.
Its communication lines are bottom-up and well-defined.
C.
Its decision p

McDonald's operates Hamburger University that trains students to ensure consistent food quality across its outlets throughout the world. This indicates that McDonalds's
A.
is organic in nature.
B.
is mechanistic in nature.
C.
has an informal structure.
D.

The relationship between strategy and structure that directly impacts a firm's performance is
A.
dynamic.
B.
independent.
C.
static.
D.
unpredictable.

While working a night job at a call center, Carlos creates an app called DineSmart, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to

Opal, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some succe

Nick just graduated from law school and wants to start his own law firm. It is best for Nick to use a _____ organizational structure.
A.
functional
B.
simple
C.
mechanistic
D.
matrix

Which of the following is an advantage offered by a functional structure?
A.
It allows for an efficient top-down communication chain and thus relies on a relatively tall structure.
B.
It facilitates a lower division of labor, which is linked to higher pro

A typical college of business (or school of management) has several areas such as management, marketing, finance, accounting, MIS, and so on. This is an example of a(n) _____ structure.
A.
simple
B.
M-form
C.
matrix
D.
functional

Why did W. L. Gore reorganize itself into a functional structure from a simple structure?
A.
A simple structure was too formalized, specialized, and centralized to really facilitate any kind of productivity.
B.
A functional structure is more decentralized

Which of the following is true of a functional structure?
A.
It offers a lower degree of specialization than a simple structure.
B.
It relies on a relatively flat organizational structure.
C.
It offers decentralized management.
D.
It relies on bottom-up c

Why does a functional structure rely on a flat organizational structure?
A.
The work in the organization is centrally coordinated by the CEO.
B.
It allows for a higher degree of specialization and domain expertise.
C.
It allows for efficient bottom-up and

Remote Inc. is a notebook manufacturing company based in Ohio. Remote's main market is Ohio. It aims at providing its products at better prices than its competitors. Which of the following structures is Remote Inc. likely to use if it has functional setup

Why must managers use a mechanistic structure to implement a cost-leadership strategy?
A.
A mechanistic structure offers a centralized structure with well-defined lines of authority.
B.
A mechanistic structure allows for a lower degree of specialization.

To effectively implement a differentiation strategy, managers rely on a functional structure that resembles an organization that is highly
A.
formalized.
B.
specialized.
C.
organic.
D.
mechanistic.

Which of the following statements is true about the use of functional structures with various business strategies?
A.
The goal of a differentiation strategy is to create competitive parity.
B.
The goal of a cost-leadership strategy is to create competitiv

A functional structure is recommended when a firm
A.
has a broad focus in terms of its product/service offerings.
B.
has a low level of diversification.
C.
has a low degree of specialization.
D.
diversifies into different product lines and geographies.

Which of the following is an advantage of using a functional structure when pursuing a cost-leadership strategy?
A.
It allows a cost-leader to upgrade core competencies in manufacturing and logistics.
B.
It enables a cost-leader to build products that are

Plow Inc. is a greeting card manufacturing company. Plow's market dominance exists primarily because of the innovative designs of its greeting cards when compared to those of its competitors. In this scenario, Plow Inc.'s managers must ideally rely on a f

Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy?
A.
It allows the firm to create incentives to foster process innovation in order to drive down cost.
B.
It allows the firm to re

Which of the following features helps match a cost-leadership strategy to a functional structure?
A.
decentralization
B.
process and product innovations
C.
flexibility and mutual adjustment
D.
focus on economies of scale

Which of the following types of organizations best helps match a differentiation strategy to a functional structure?
A.
ambidextrous organization
B.
mechanistic organization
C.
organic organization
D.
rigid organization

Broadview Company integrated certain important functions of Widget.com with Widget, while keeping other functions independent. To support this integration, the president of Widget shifted compensation incentives for both senior teams to accomplish joint g

Curve Inc. is a software development firm based in California. It strives to provide highly differentiated software at cheaper prices when compared to its competitors. Which of the following organizational designs should Curve Inc. implement to ensure the

StickOn Inc. is an adhesive manufacturer. After a slight dip in production numbers, it forms a team to find a quick solution to this problem, at least for the shorter term. This scenario best exemplifies
A.
exploration.
B.
exploitation.
C.
co-opetition.
D

Which of the following is a disadvantage of a functional strategy?
A.
It frequently lacks the tools required to pursue a cost-leadership strategy.
B.
It does not facilitate rich communication between members of the same department.
C.
It cannot effectivel

When a firm diversifies into different product lines and geographies, a _____ structure is preferred.
A.
simple
B.
functional
C.
multidivisional
D.
network

Kolt Inc., a large and successful retail chain on the West Coast, decides to expand its operations across the U.S. Which of the following organizational structures should Kolt Inc. use?
A.
basic
B.
simple
C.
multidivisional
D.
functional

Frappe operates as a strategic business unit (SBU) under More or Less Inc., a home-furnishings manufacturer. From this information, it may be reasonable to infer that
A.
Frappe does not have its own profit and loss responsibility.
B.
Frappe is dependent o

W. L. Gore has four product divisions: electronic products, industrial products, medical products, and fabrics division. It also has manufacturing facilities in the U.S., China, Germany, Japan, and Scotland, and business activities in 30 countries across

Why should managers using the M-form organizational structure to support a related-diversification strategy ideally concentrate decision making at the top of the organization?
A.
It allows a high level of integration.
B.
It helps contain the core competen

FTZ Inc. is an electronic appliances manufacturer that has many strategic business units (SBUs), among which, television and computers share a close relationship. These SBUs have to fight each other for R&D funding because there is a combined amount set a

An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a _____ structure.
A.
functional
B.
multidivisional
C.
matrix
D.
simple

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a _____ structure.
A.
global

Which of the following global strategies best matches with a multidivisional structure?
A.
international
B.
multidomestic
C.
global-standardization
D.
transnational

Which of the following organizational structures matches best with an international strategy?
A.
simple
B.
matrix
C.
multidivisional
D.
functional

Why is the optimal organizational structure a multidivisional structure?
A.
Its focus is on driving down costs.
B.
Its focus is on producing differentiated products.
C.
Its focus is on retaining activities within a single geographic area.
D.
Its focus is

_____ describes the collectively shared values and norms of an organization's members.
A.
Competitive advantage
B.
Organizational structure
C.
Organizational culture
D.
Core competency

_____ define appropriate employee attitudes and behaviors.
A.
Values
B.
Artifacts
C.
Appraisals
D.
Norms

Employees learn about an organization's culture through the process of
A.
socialization.
B.
exploitation.
C.
co-opetition.
D.
acculturation.

Zappos' 10 core values that define what it means for employees to be working at Zappos also define the _____ of Zappos.
A.
organizational structure
B.
organizational culture
C.
organizational strategy
D.
organizational controls

The most important yet least visible element of organizational culture is
A.
values.
B.
norms.
C.
laws.
D.
artifacts.

Which of the following statements best describes groupthink?
A.
It is a process by which the founder defines and shapes an organization's culture, which can persist for decades after his or her departure.
B.
It is a situation in which organizations compet

Which of the following types of groups is most susceptible to groupthink?
A.
a diverse group
B.
a cohesive group
C.
a heterogeneous group
D.
a decentralized group

Zappos established its unique organizational culture
A.
through explicitly stated values that are connected to its reward system.
B.
through input control systems that mandated adherence to organizational values.
C.
by closely monitoring employees calls w

Why does Zappos offer its new recruits $2,000 to quit at the end of the first week of their job?
A.
It is confident that employees will be impressed with the company's creativity and will stay on for a longer term.
B.
It does not believe that a firm's cul

What is most likely to happen if a firm relies too long on a competency without honing, refining, and upgrading as the firm and the environment change?
A.
The firm's original core competency can turn from a liability into an asset.
B.
The firm's organizat

GM's insistence on sticking to a bureaucratic culture combined with its M-form structure and its subsequent failure to adapt to changing customer preferences for more fuel-efficient cars, produce higher quality, and create innovative designs best exemplif

Organizational culture can be the basis of a firm's competitive advantage if
A.
it is valuable, rare, and difficult to imitate.
B.
it is trademarked and copyright protected.
C.
it converts the organization's core competency into its core rigidity.
D.
it c

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?
A.
W. L. Gore & Associates organizes its employees into project-based teams.
B.
Apple develops high-tech products that are prefe

Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos?
A.
Their culture reflects complex relationships with their employees, customers, and suppliers.
B.
They produce products that cannot be copied easily be

Which of the following statements about an organization's culture is not true?
A.
A positive culture motivates employees by appealing to high ideals.
B.
A strong monitoring and supervision mechanism is needed to enforce the culture.
C.
A positive culture

Which of the following statements is true of organizational culture?
A.
Changes in culture are too frequent to have any impact on strategic implementation.
B.
It is better for founder CEOs to create a relevant culture, structure, and strategy in the early

Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and
A.
eventually gives way to core rigidity.
B.
obeys the VRIO principles.
C.
does not d

In which of the following ways does Zappos achieve organizational control?
A.
It continually changes the organizational values that guide its employees.
B.
It refrains from monitoring its employees' calls.
C.
It encourages employees to be creative and inn

Which of the following best exemplifies the use of input controls?
A.
McDonald's use of standard operating procedures
B.
GM's use of the multidivisional strategy
C.
Zappos' use of monitoring-free customer service calls
D.
Southwest Airline's use of employ

Coda Inc. is an apparel manufacturer. The management at Coda prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This

Why are controls like budgets and operating procedures that McDonald's implements known as input controls?
A.
They are independent of an organization's culture.
B.
They are implemented by corporate headquarters.
C.
They are considered before employees mak

A company that is using extrinsic motivation as an output control mechanism will most likely
A.
organize training sessions for employees.
B.
cut budgets during recessions.
C.
implement a peer review system.
D.
threaten to lay off employees if they do not

Output controls can sometimes discourage collaboration among different strategic business units. However, more and more work requires creativity and innovation, especially in highly-developed economies. One way firms are grappling with this issue is by
A.

Which of the following is true of the process of organizing for competitive advantage?
A.
To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.
B.
Strategy formulation and strategy implement

The key components of organizational design are
A.
structure, culture, and control.
B.
structure, efficiency, and control.
C.
innovation, efficiency, and culture.
D.
innovation, culture, and control.

According to Alfred Chandler in his book Strategy and Structure, implementing a successful strategy depends on having an organizational structure that is _____ enough to accommodate the formulated strategy and future growth and expansion.
A.
insightful
B.

_____ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure.
A.
PESTEL factors
B.
Formalization
C.
Organizational inertia
D.
Centralization

GreenValue Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, GreenValue defined and measured it success by financial met

What element of organizational structure deals with positioned-based reporting lines?
A.
specialization
B.
formalization
C.
centralization
D.
hierarchy

Maurice sent in a complaint about a rude salesperson he dealt with at FirstElectronics Inc. He didn't get a response for about three months. Also, when the response finally came, it was just a formal, cursory letter. Based on this scenario, FirstElectroni

Cynthia works as a front-line employee for a nationwide retail store. She reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the follow

Hank's Hot Dogs is a nationwide fast-food chain. Decision power resides at the top of the organization. Each job is documented in minute detail. The firm has many levels of supervision, including vice presidents and regional managers. Hank's headquarters

Which of the following accurately describes an organic organization?
A.
an inflexible organization that fosters slow decision making and high employee motivation
B.
an inflexible organization that fosters fast decision making and high employee motivation

Which of the following provides an example of a common drawback of a functional strategy?
A.
Bert had a difficult time communicating efficiently with the manager of another department.
B.
Marietta was surprised about the inflexibility of her firm when it

A(n) _____ organization always attempts to balance and harness different activities in trade-off situations.
A.
centralized
B.
ambidextrous
C.
mechanistic
D.
formalized

Monica's Cosmetics Inc. has a functional structure that is flexible enough to allow it to leverage its brand name across different products. By doing this, Monica's is reaping ____ from its core competencies.
A.
economies of scale
B.
economies of scope
C.

Larry's Auto Repair is a small business in which the founder, Larry, makes most of the important strategic decisions as well as runs the day-to-day operations. He has three mechanics and a financial secretary working for him. Based on this scenario, Larry

The _____ structure consists of several distinct strategic business units (SBUs), each with its own profit-and-loss responsibility.
A.
ambidextrous
B.
multidivisional
C.
functional
D.
organic

Which of the following shows founder imprinting?
A.
A company's founder defines and shapes her organization; the founder dies; the influence of the founder on the organization's culture persists for decades.
B.
A company's founder defines and shapes her o

DigiGames Inc. established itself as the foremost producer of computer games. However, as the market for these games moved from laptop computers to cell phones based on cloud applications, DigiGames failed to adapt its games enough to this new environment

Strong organizational cultures that are strategically relevant align employees' behaviors more fully with the organization's
A.
hierarchical rigidity.
B.
strategic goals.
C.
hierarchical structure.
D.
strategic flexibility.

Veronica sets up a business consulting firm in which the employees are motivated because they find their work interesting and creative. She carefully hires workers who fit well with their assigned tasks. Also, she clearly defines the results expected of e

Successful _____ requires managers to design and shape structure, culture, and control mechanisms.
A.
strategy innovation
B.
strategy formulation
C.
strategy implementation
D.
strategy diversification

Which of the following are advantages of functional structures?

What is an advantage of the functional organization structure quizlet?

Which of the following is a disadvantage of a functional strategy quizlet?

Which of the following is an advantage of functional departmentalization quizlet?